Bad Gas
If you think the clobbering of growth stocks in 2022 was harsh, check out the performance of natural gas. Towards the end of last summer when there were real worries that many Europeans were going to freeze to death in the winter cold without gas to heat their homes, the price of natural gas in the US traded to the highest levels in over a decade and approached double-digits. As steep as the runup last year was, the downfall has been even steeper. Suffice it to say, the price of the front month futures contract is nowhere near $10 anymore, and just this week dropped below $3 to its lowest level in more than a year. More recently, the slide has been pretty relentless with 14 declines over the last 20 trading days.
The chart below shows the 100-trading day rate of change in natural gas futures going back to 1991. Through Thursday’s close, the price of the front month contract was down by more than two-thirds (68.21%), which, believe it or not, is the steepest drop over a 100-trading day period in the history of the futures contract (since 1991). It’s interesting to note that the current decline comes just eight months after what was the second-strongest 100-trading day rally in the history of the futures contract (+147%). The strongest 100-day rally was all the way back in December 2000 when prices surged 160%. Like the rally last May, that strong rally was followed eight months later by what is now the second-largest 100-day decline in natural gas prices.
The lesson here may be that if natural gas rallies 100% in 100 days, you probably want to avoid it. In the eight prior periods when the commodity rallied 100% in 100 days, its median performance over the following year was a decline of 30.1% with declines 75% of the time. Conversely, the performance of natural gas following 50%+ declines in 100 days hasn’t been as consistent. In the five prior periods that fit that criteria, natural gas was up by a median of just 1.4% with gains three out of five times. Click here to learn more about Bespoke’s premium stock market research service.
Bespoke’s Morning Lineup — 1/27/23
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“If it doesn’t matter who wins or loses, then why do they keep score?” — Vince Lombardi
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It’s conference championship weekend for the NFL as the Bengals travel to Kansas City in the AFC and the 49ers travel to Philadelphia in the NFC. The AFC championship game is an exact repeat of last year’s match-up when the Bengals upset the Chiefs on the road. We’ve only seen the same two teams play in the same location in the AFC Championship game in back-to-back years two prior times, once in 2011/2012 (Ravens at Patriots) and once in 1978/1979 (Oilers at Steelers).
If you’re looking for more individual stock ideas, yesterday we updated our Bespoke 50 list of noteworthy Russell 3,000 growth stocks. We like this list as an idea generator for further research into the 50 names that make the cut each week.
At the index level, take a look below at our Trend Analyzer snapshot of major US index ETFs. It’s green across the board when it comes to 50-DMA spread, 5-day change, and YTD change. The Nasdaq 100 (QQQ) is in the lead on a YTD basis with a gain of 10.1%, and it’s also up the most over the last five days and the farthest above its 50-DMA. This is the opposite of what we saw in 2022 when QQQ lagged the rest of the market severely. As you can see, every single index ETF on the list is now “overbought” with the exception of the Dow 30 (DIA).
Our Morning Lineup keeps readers on top of earnings data, economic news, global headlines, and market internals. We’re biased (of course!), but we think it’s the best and most helpful pre-market report in existence!
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The Bespoke 50 Growth Stocks — 1/26/23
The “Bespoke 50” is a basket of noteworthy growth stocks in the Russell 3,000. To make the list, a stock must have strong earnings growth prospects along with an attractive price chart based on Bespoke’s analysis. The Bespoke 50 is updated weekly on Thursday unless otherwise noted. There were nine changes to the list this week.
The Bespoke 50 is available with a Bespoke Premium subscription or a Bespoke Institutional subscription. You can learn more about our subscription offerings at our Membership Options page, or simply start a two-week trial at our sign-up page.
The Bespoke 50 performance chart shown does not represent actual investment results. The Bespoke 50 is updated weekly on Thursday. Performance is based on equally weighting each of the 50 stocks (2% each) and is calculated using each stock’s opening price as of Friday morning each week. Entry prices and exit prices used for stocks that are added or removed from the Bespoke 50 are based on Friday’s opening price. Any potential commissions, brokerage fees, or dividends are not included in the Bespoke 50 performance calculation, but the performance shown is net of a hypothetical annual advisory fee of 0.85%. Performance tracking for the Bespoke 50 and the Russell 3,000 total return index begins on March 5th, 2012 when the Bespoke 50 was first published. Past performance is not a guarantee of future results. The Bespoke 50 is meant to be an idea generator for investors and not a recommendation to buy or sell any specific securities. It is not personalized advice because it in no way takes into account an investor’s individual needs. As always, investors should conduct their own research when buying or selling individual securities. Click here to read our full disclosure on hypothetical performance tracking. Bespoke representatives or wealth management clients may have positions in securities discussed or mentioned in its published content.
Bespoke’s Weekly Sector Snapshot — 1/26/23
Chart of the Day: Prices At The Pump On the Up and Up
Bespoke’s Morning Lineup — 1/26/23
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“Market makers know that the market is always right. You are wrong if you are losing money for any reason at all. Market makers have that drilled into their head. They know value is irrelevant in times of market stress.” — Michael Platt, founder of Bluecrest Capital
Below is a snippet of content from today’s Morning Lineup for Bespoke Premium members. Start a two-week trial to Bespoke Premium now to access the full report.
Tesla (TSLA) reported earnings after the close yesterday and beat expectations on both the top and bottom line. The stock is set to open higher by just over 7% when the bell rings this morning, which would be its 15th gap higher on earnings out of the 50 quarterly results the company has posted since going public. Below is a snapshot of the 14 prior gaps higher of 5%+ in reaction to earnings for Tesla as shown in our Earnings Explorer tool. Historically, the stock has averaged a slight decline of 1.4% from the open to the close of trading on these 14 prior earnings reaction days, with positive returns from the open to close 5 out of 14 times. Twice out of 14 times, TSLA has gapped up 5%+ on earnings only to finish the day lower because of sharp intraday reversals. These two reversals came on back-to-back earnings releases in April and July of 2020. Only once has TSLA tacked on another 5%+ from the open to the close after gapping up 5%+, and that came back in August 2018 when shares opened up 9.2% and went up another 6.4% intraday for a full-day gain of 16.2%.
In today’s Morning Lineup, we also take a look at a few bullish chart patterns we’ve identified across key US sectors and groups.
Our Morning Lineup keeps readers on top of earnings data, economic news, global headlines, and market internals. We’re biased (of course!), but we think it’s the best and most helpful pre-market report in existence!
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Daily Sector Snapshot — 1/25/23
Chart of the Day: Shorts Running Higher
Bespoke’s Morning Lineup — 1/25/23
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“I’ve actually made a prediction that within 30 years a majority of new cars made in the United States will be electric. And I don’t mean hybrid, I mean fully electric.” – Elon Musk, 6/25/08
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When Elon Musk made the prediction in 2008 that the majority of new cars made in the US would be electric within 30 years, the flagship Tesla Model S — the first modern all-electric vehicle — was still four years from debuting in 2012. Hybrids like the Toyota Prius were certainly an option in 2008, but fully electric cars were simply not something that consumers (or the government) were thinking about.
We’re now closing in on the halfway point of Musk’s 30-year prediction, and we’d say that he’s on his way. In 2022, EV sales in the US represented 5.8% of total sales, up two-thirds from the prior year’s 3.2% market share. This increase came even as total vehicle sales declined 8% in 2022. The “tipping point” for wider EV adoption is said to be around 5%, and with that mark now eclipsed, Bloomberg estimates that half of all US auto sales will be EVs by 2030 — a full eight years sooner than Musk predicted back in 2008. Tesla (TSLA) reports quarterly earnings after the close today.
After initially trading higher by more than 4% in response to earnings after the close yesterday, shares of Microsoft $MSFT are currently set to open down 2.5% after investors digested less-than-stellar revenue guidance from the company. Microsoft’s weakness has the Nasdaq 100 ETF (QQQ) trading down more than 1% pre-market, so we’re currently set for a pretty big gap down at the open.
In today’s full Morning Lineup, we take a closer look at technicals for the “big Tech” mega-caps, and we analyze sector breadth measures that are acting contrary to the general economic consensus at the moment.
Our Morning Lineup keeps readers on top of earnings data, economic news, global headlines, and market internals. We’re biased (of course!), but we think it’s the best and most helpful pre-market report in existence!
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